Short Paper on Internet Gambling's Legality
The following is a short paper I just wrote for Persuasive Argument. The topic I chose is the legality of internet gambling. This paper is an exercise. The subject of the paper is pointing out that internet gambling is legal under US law. Enjoy.
Opponents of internet gambling suggest that gambling online is an activity in which it is illegal for US citizens to participate when in fact, it is quite legal for them to do so.
The law to which opponents of internet gambling most often allude is United States Code Title 18, Chapter 50, Section 1084, more commonly known as the Federal Wire Act of 1961. It is a bill passed by Congress and signed by the President and enacted into Federal law. Subsection A of the law specifically prohibits the transmission of bets or betting information between states or with another country via “a wire communication facility” for the purposes of wagering on sports.# The law essentially forbids the use of interstate phone calls to place bets on sporting events. For instance, a person in Massachusetts, a Commonwealth in which sports gambling is illegal, could not call Las Vegas and place $500 on the Patriots to beat the Colts. The law does not prohibit the transmission of information concerning sports betting in between two places in which the betting would be legal. So a person in Reno could call Las Vegas and place a bet on the Patriots to win.
The critical element of the Wire Act is that it specifically prohibits one type of activity, using wire communications, regarding one type of gambling, betting on sports. There is no stipulation concerning the placement of sports bets via the internet. Obviously, the internet did not exist in 1961 so there would be no stipulation against it. However, the law has not been amended since the inception of the internet to include the use of the internet as an illegal medium to bet on sports. The Act also does not prohibit any other kinds of gambling such as roulette or craps. Of course, betting on roulette over the phone or placing bets on a game of craps over the phone is somewhat ludicrous. In 1961, the concept of virtual roulette wheels and craps tables did not exist.
The Federal Wire Act of 1961 is obviously outdated. In the 45 years that have passed since it became law, more dynamic methods of telecommunications have been invented. Wireless telephones, and the internet are the two most obvious examples of new communication mediums which do not fall under the scope of the Wire Act. The law has not been updated or amended to reflect changes in telecommunications or the changes in proxy gambling (placing bets through a medium such as the internet with a gambling establishment located in a remote place such as another state or another country).
For opponents of internet gambling, the specificity of the Wire Act is its undoing as a law prohibiting online casino betting in the United States. The law is quite clear in that it only bans sports betting over the telephone. An activity such as playing black jack with an online casino over the internet is not forbidden by the Wire Act. The bets placed are not bets on sports, nor is a telephone necessarily used.
The applicability of the Wire Act was tested in 2002 by the US Court of Appeals For the Fifth Circuit. In the case of Larry Thompson et al v. MasterCard International Inc, Fleet Bank, and Fleet Credit Card Services, Larry Thompson attempted to regain money he had lost through internet gambling. His case was centered around the argument that since his losses were incurred due to participation in an illegal activity, he did not have to pay his debt to the credit card companies he used to send money to an online gambling site. A lower court ruled against him, as did the Appellate court of the Fifth Circuit. Thompson cited the Wire Act as a Federal law which prohibited online gambling. This would consequently nullify the debt he incurred since the credit card companies he used would have participated in an illegal financial transfer. In the Court’s opinion, the Wire Act was not applicable because the gambling was not sports betting, nor did it occur over the phone. In the Court’s own words:
"The district court concluded that the Wire Act concerns gambling on sporting events or contests…We agree with the district court’s statutory interpretation, its reading of the relevant case law, its summary of the relative legislative history, and its conclusion.# "
The US Court of Appeals For the Fifth Circuit is the highest US Court to have issued a ruling concerning the Wire Act’s applicability to non-sports internet gambling. Since the Court did not overturn the initial ruling, nor has the Wire Act been deemed applicable to non-sports internet gambling, nor has any higher Court ruled otherwise, nor has any Federal law since been passed to prohibit non-sports internet gambling, it is perfectly legal under US law for US citizens to play poker, black jack, roulette, craps, or otherwise gamble over the internet.
Speaking of gambling, my fake sports bets for Saturday's college football action:
$100 on Air Force -6.5 @ Army
$100 on Wake Forest +3.5 vs. Boston College
$100 on Maryland +20.0 @ Clemson
This already happened, but I did put on my fake bet sheet:
$100 on Louisville +0.0 vs. West Virginia
$100 on OVER 56.5 West Virginia @ Louisville
Win, win
Google spell check says internet should be capitalized. What?
Opponents of internet gambling suggest that gambling online is an activity in which it is illegal for US citizens to participate when in fact, it is quite legal for them to do so.
The law to which opponents of internet gambling most often allude is United States Code Title 18, Chapter 50, Section 1084, more commonly known as the Federal Wire Act of 1961. It is a bill passed by Congress and signed by the President and enacted into Federal law. Subsection A of the law specifically prohibits the transmission of bets or betting information between states or with another country via “a wire communication facility” for the purposes of wagering on sports.# The law essentially forbids the use of interstate phone calls to place bets on sporting events. For instance, a person in Massachusetts, a Commonwealth in which sports gambling is illegal, could not call Las Vegas and place $500 on the Patriots to beat the Colts. The law does not prohibit the transmission of information concerning sports betting in between two places in which the betting would be legal. So a person in Reno could call Las Vegas and place a bet on the Patriots to win.
The critical element of the Wire Act is that it specifically prohibits one type of activity, using wire communications, regarding one type of gambling, betting on sports. There is no stipulation concerning the placement of sports bets via the internet. Obviously, the internet did not exist in 1961 so there would be no stipulation against it. However, the law has not been amended since the inception of the internet to include the use of the internet as an illegal medium to bet on sports. The Act also does not prohibit any other kinds of gambling such as roulette or craps. Of course, betting on roulette over the phone or placing bets on a game of craps over the phone is somewhat ludicrous. In 1961, the concept of virtual roulette wheels and craps tables did not exist.
The Federal Wire Act of 1961 is obviously outdated. In the 45 years that have passed since it became law, more dynamic methods of telecommunications have been invented. Wireless telephones, and the internet are the two most obvious examples of new communication mediums which do not fall under the scope of the Wire Act. The law has not been updated or amended to reflect changes in telecommunications or the changes in proxy gambling (placing bets through a medium such as the internet with a gambling establishment located in a remote place such as another state or another country).
For opponents of internet gambling, the specificity of the Wire Act is its undoing as a law prohibiting online casino betting in the United States. The law is quite clear in that it only bans sports betting over the telephone. An activity such as playing black jack with an online casino over the internet is not forbidden by the Wire Act. The bets placed are not bets on sports, nor is a telephone necessarily used.
The applicability of the Wire Act was tested in 2002 by the US Court of Appeals For the Fifth Circuit. In the case of Larry Thompson et al v. MasterCard International Inc, Fleet Bank, and Fleet Credit Card Services, Larry Thompson attempted to regain money he had lost through internet gambling. His case was centered around the argument that since his losses were incurred due to participation in an illegal activity, he did not have to pay his debt to the credit card companies he used to send money to an online gambling site. A lower court ruled against him, as did the Appellate court of the Fifth Circuit. Thompson cited the Wire Act as a Federal law which prohibited online gambling. This would consequently nullify the debt he incurred since the credit card companies he used would have participated in an illegal financial transfer. In the Court’s opinion, the Wire Act was not applicable because the gambling was not sports betting, nor did it occur over the phone. In the Court’s own words:
"The district court concluded that the Wire Act concerns gambling on sporting events or contests…We agree with the district court’s statutory interpretation, its reading of the relevant case law, its summary of the relative legislative history, and its conclusion.# "
The US Court of Appeals For the Fifth Circuit is the highest US Court to have issued a ruling concerning the Wire Act’s applicability to non-sports internet gambling. Since the Court did not overturn the initial ruling, nor has the Wire Act been deemed applicable to non-sports internet gambling, nor has any higher Court ruled otherwise, nor has any Federal law since been passed to prohibit non-sports internet gambling, it is perfectly legal under US law for US citizens to play poker, black jack, roulette, craps, or otherwise gamble over the internet.
Speaking of gambling, my fake sports bets for Saturday's college football action:
$100 on Air Force -6.5 @ Army
$100 on Wake Forest +3.5 vs. Boston College
$100 on Maryland +20.0 @ Clemson
This already happened, but I did put on my fake bet sheet:
$100 on Louisville +0.0 vs. West Virginia
$100 on OVER 56.5 West Virginia @ Louisville
Win, win
Google spell check says internet should be capitalized. What?
posted by rob | 4:25 AM
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